In just two weeks, the availability of safe, affordable, reliable mortgage financing will diminish. If this happens, many home buyers run the risk of being priced out of the American Dream of home ownership. Even worse, this could hold back the housing recovery.
The current FHA and GSE loan limits have been in place since February of 2008, when they were passed as part of the Emergency Stimulus Act. Housing conditions have not improved enough to warrant letting the limits drop.
More than 669 counties in 42 states and the territories would be negatively impacted by the loan limit change. The average decline in loan limits would be more than $68,000.
The current loan limits are set to expire on September 30, 2011. Unless Congress acts, FHA and GSE loan limits will drop to 115% of local area median home price with a cap of $625,500Â (from the current limit of 125% of local area median home price with a cap of $729,750).
Well-qualified buyers don’t need yet another hurdle to access affordable mortgage financing. We cannot let this happen. Not in this market. Not now.
